Note 8 - Business Segments

3 Months Ended

Mar. 31, 2013

Segment Reporting Disclosure [Text Block]

NOTE 8: Business Segments

The Corporation operates in a decentralized fashion in three principal business segments: Retail Banking, Mortgage Banking and Consumer Finance. Revenues from Retail Banking operations consist primarily of interest earned on loans and investment securities and service charges on deposit accounts. Mortgage Banking operating revenues consist principally of gains on sales of loans in the secondary market, loan origination fee income and interest earned on mortgage loans held for sale. Revenues from Consumer Finance consist primarily of interest earned on automobile retail installment sales contracts.

The Corporation’s other segment includes an investment company that derives revenues from brokerage services, an insurance company that derives revenues from insurance services, and a title company that derives revenues from title insurance services. The results of the other segment are not significant to the Corporation as a whole and have been included in “Other.”  Certain expenses of the Corporation are also included in “Other,” and consist primarily of interest expense associated with the Corporation’s trust preferred capital notes and other general corporate expenses.

	Three Months Ended March 31, 2013
(Dollars in thousands)	Retail Banking			Mortgage Banking		Consumer Finance		Other			Eliminations			Consolidated
Revenues:
Interest income	$	7,816		$	427	$	12,172	$	—		$	(1,292	)	$	19,123
Gains on sales of loans		—			4,797		—		—			—			4,797
Other noninterest income		1,711			1,078		298		310			—			3,397
Total operating income		9,527			6,302		12,470		310			(1,292	)		27,317
Expenses:
Interest expense		1,544			92		1,616		188			(1,292	)		2,148
Provision for loan losses		400			30		2,750		—			—			3,180
Salaries and employee benefits		4,142			3,841		1,990		192			—			10,165
Other noninterest expenses		3,025			1,429		1,114		392			—			5,960
Total operating expenses		9,111			5,392		7,470		772			(1,292	)		21,453
Income (loss) before income taxes		416			910		5,000		(462	)		—			5,864
Provision for (benefit from) income taxes		(280	)		364		1,950		(176	)		—			1,858
Net income (loss)	$	696		$	546	$	3,050	$	(286	)	$	—		$	4,006
Total assets	$	830,597		$	59,674	$	282,991	$	3,493		$	(183,378	)	$	993,377
Capital expenditures	$	1,205		$	101	$	19	$	2		$	—		$	1,327

	Three Months Ended March 31, 2012
(Dollars in thousands)	Retail Banking			Mortgage Banking		Consumer Finance		Other			Eliminations			Consolidated
Revenues:
Interest income	$	8,066		$	574	$	11,340	$	—		$	(1,224	)	$	18,756
Gains on sales of loans		—			4,103		—		—			—			4,103
Other noninterest income		1,566			1,115		260		337			2			3,280
Total operating income		9,632			5,792		11,600		337			(1,222	)		26,139
Expenses:
Interest expense		2,158			106		1,550		249			(1,224	)		2,839
Provision for loan losses		750			75		1,900		—			—			2,725
Salaries and employee benefits		4,006			3,582		1,876		278			—			9,742
Other noninterest expenses		2,909			1,332		923		151			—			5,315
Total operating expenses		9,823			5,095		6,249		678			(1,224	)		20,621
Income (loss) before income taxes		(191	)		697		5,351		(341	)		2			5,518
Provision for (benefit from) income taxes		(498	)		279		2,087		(130	)		—			1,738
Net income (loss)	$	307		$	418	$	3,264	$	(211	)	$	2		$	3,780
Total assets	$	786,829		$	75,864	$	254,913	$	3,077		$	(175,212	)	$	945,471
Capital expenditures	$	173		$	51	$	58	$	—		$	—		$	282

The Retail Banking segment extends a warehouse line of credit to the Mortgage Banking segment, providing a portion of the funds needed to originate mortgage loans. The Retail Banking segment charges the Mortgage Banking segment interest at the daily FHLB advance rate plus 50 basis points. The Retail Banking segment also provides the Consumer Finance segment with a portion of the funds needed to originate loans by means of a variable rate line of credit that carries interest at one-month LIBOR plus 200 basis points and fixed rate loans that carry interest rates ranging from 3.8 percent to 8.0 percent. The Retail Banking segment acquires certain residential real estate loans from the Mortgage Banking segment at prices similar to those paid by third-party investors. These transactions are eliminated to reach consolidated totals. Certain corporate overhead costs incurred by the Retail Banking segment are not allocated to the Mortgage Banking, Consumer Finance and Other segments.